GE uses Lean principles, plumbers’ input to design, build GeoSpring water heater

March 1, 2012
LOUISVILLE, KY. —On Friday, Feb. 10, the GeoSpring, GE’sfirst hybrid electric ENERGY STAR-qualified water heater manufactured in the U.S., rolled off the assembly line at GE’s Appliance Park in Louisville, Ky.   

LOUISVILLE, KY. —On Friday, Feb. 10, the GeoSpring, GE’sfirst hybrid electric ENERGY STAR-qualified water heater manufactured in the U.S., rolled off the assembly line at GE’s Appliance Park in Louisville, Ky.  The GeoSpring has the distinction of being the first GE Appliances’ product designed and built using Lean manufacturing principles.

The Lean process, which uses a cross-functional team of employees, including hourly manufacturing workers, to design the product and the manufacturing process, helped increase the competitiveness of the operation by identifying and removing waste in materials and work effort often found in traditional manufacturing. By designing the product around lean principles, plumbers in the field were also involved in the process, giving their input regarding the water heater, which the product team then incorporated into the GeoSpring design.

According to Stephen Downer, GE product general manager for water products, GE travelled the country the better part of 2010 and 2011, training more than 2,000 individuals in the plumbing industry about the GeoSpring and obtaining their feedback about the product design. The plumbing training classes consisted of formal dinner presentations with up to 100 participants to one-on-one training sessions at plumbing distributor showrooms.

The Water Heater Experts, headquartered in Spartanburg, S.C., with operations throughout the Carolinas, was one of the first installers and dealers for the GeoSpring hybrid electric water heater. 

“GE was very helpful in providing a number of training materials, available both on-line and in ‘printed form’ for our contractors,” said Scott D. Martin, president of The Water Heater Experts. “Discounts were available to purchase display units that were also used for our internal training purposes. In addition, GE also provided a very unique truck-tour for the new GeoSpring product launch.  This truck toured the country and made specific stops in our local markets that allowed our personnel to see the unit firsthand and ask questions directly to the GE engineers. In addition, these tours usually took place near a large mall or retail location, which generated some potential leads for our company at the same time.”

Once plumbers at the Water Heater Experts gained field experience with the GeoSpring water heater, they we were encouraged to share that information with the GE team. 

“While we were very pleased with the overall design of the unit, several of our contractors felt there could be a few design changes that would enhance the installation and servicing of the unit (location of the T&P, location of the air filter, etc.),” said Martin. “It is always encouraging when a manufacturer is willing to listen to the field and make improvements to their products.”

According to Downer, the largest changes GE made in product design based on plumber and consumer feedback were moving the T&P valve to the front of the unit for easier installation; re-engineering the filter so that it required minimal clearance during installation; and switching from two variable speed fans to one single speed fan to reduce sound.    

Regarding selling the GeoSpring water heater, Martin said that from his company’s experience the most important feature to point out to the customer is the energy savings.

“Homeowners are getting more and more concerned about their energy bills and with the annual energy savings generated by the GeoSpring (compared to a standard electric water heater), there is a very good story,” said Martin. “However, just like any solution, a qualified installer needs to ask the right questions of the homeowner to make sure that any water heating solution meets their specific needs and can be installed in the proper environment, per the manufacturer’s instructions and in accordance with local and state codes.”

GE plans to continue its training sessions to familiarize plumbers with the GeoSpring hybrid water heater.

Some of the features discussed during the training sessions to make plumbers comfortable with presenting this water heater as an option to their customers include explaining how it works, how easy it is to install, and how quickly it pays for itself, noted Downer.

“Our field sales team, consisting of more than 300 individuals, will continue to reach out to the plumbing industry for training this year,” said Downer. “Our approach has not changed in that we will continue to spread the product benefits to as many individuals in the plumbing industry as possible. We also plan to launch a professional tab on our website which demonstrates installation, FAQs, and provides information on how to become a certified servicer of the GeoSpring. The plumbing channel has been receptive to the product and excited about the technology.”

Hybrid technology

According to Downer, the water heater is the largest energy consuming appliance outside of a home’s HVAC system.

“There are very few products for your home that will save homeowners as much money as the GeoSpring,” said Downer. “With the state of today’s economy, we’re betting on acceptance of this technology from consumers who want to save money on their energy bills and support the GE employees in the U.S.”

The GeoSpring costs an average of $195 to operate annually, uses 62% less electricity than a standard electric water heater and will pay for itself in less than 2.5 years, based on DOE test procedure and comparison of a 50-gal. standard electric tank water heater using 4879 kWh every year vs. the GeoSpring hybrid water heater using 1830 kWh every year.

The GeoSpring Hybrid Water Heater combines energy-saving heat-pump technology with traditional electric heating systems used in most conventional water heaters on the market today. This hybrid technology is designed to absorb heat in ambient air and transfer it into the water, requiring less energy than the energy used to generate radiant heat – as used in a conventional electric tank water heater.

Features of the GeoSpring include easy installation, it has the same footprint and electrical connections as the standard electric water heater; integrated electronics on the control panel, offering features such as a Vacation mode, which will lower the water temperature to 50°F for the duration of a trip and then automatically re-energize itself on the day before the homeowner’s return; and more control over water temperature, it can be adjusted in one degree increments from 100°F to 140°F degrees. The GeoSpring also provides the same amount of hot water as traditional 50-gal. standard electric water heaters. State and local tax credits and utility rebates for purchasing the ENERGY STAR-qualified water heater may also be available.

Lean manufacturing

The GeoSpring Hybrid Water Heater manufacturing facility is the first assembly plan to open at Appliance park since 1957. The $38 million investment in the new product and a revitalized facility is the first milestone in commitments GE has made since 2009 to invest a total of $1 billion ($800 million in Louisville) and create more than 1,300 new jobs in the U.S. by 2014.

The new product and other recent investments at Appliance Park has also created hundreds of skilled salaried jobs in fields such as engineering, industrial design and manufacturing.

“The journey we started in 2009 to get to this day has been an inspirational one,” said GE Appliances President and CEO Charles “Chip” Blankenship. “To reverse decades of outsourcing by bringing new, industry-leading products and jobs back to the U.S. takes tremendous cooperation, imagination, courage and plain hard work by a lot of people. I want to thank our local union, our employees, government and company officials for having and executing a vision that is bringing these jobs to Appliance Park and creating a bright future for our business.”

Lean manufacturing and a more competitive wage structure for new employees led to the selection of Louisville as the production site for the new water heater instead of China, where an earlier version of the product was made. Not only can the new product now be made more competitively in the U.S., the GeoSpring Hybrid Water Heater, developed by the Louisville team, has an enhanced feature set, offers better performance with greater energy savings and will be more affordable.

State and local governments also supported putting the new GeoSpring plant in Louisville with up to $17 million in incentives to design and build the new energy-efficient facility and other investments that the company will make at Appliance Park during the next several years.

“We made a commitment early in my administration that energy-related development would be a high priority,” Kentucky Governor Steve Beshear said. “We developed an aggressive plan to not only research and develop new kinds of energy production, but to attract businesses and projects that are similarly committed to cleaner, greener energy applications. GE’s new hybrid water heater is a perfect match for our energy commitment and our strong manufacturing core.”

About the Author

Candace Roulo

Candace Roulo, senior editor of CONTRACTOR and graduate of Michigan State University’s College of Communication Arts & Sciences, has 15 years of industry experience in the media and construction industries. She covers a variety of mechanical contracting topics, from sustainable construction practices and policy issues affecting contractors to continuing education for industry professionals and the best business practices that contractors can implement to run successful businesses.      

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